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The official Opposition is worried that the ongoing beer battle between the Saskatchewan government and Rachel Notley’s Alberta NDP has overshadowed what amounts to a tax break for out-of-province brewers in Saskatchewan.

The province’s decision to adjust the markup rates for beer sold through the Saskatchewan Liquor and Gaming Authority (SLGA) could have sizable benefits for the world’s largest breweries, according to the NDP’s SLGA critic.

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“This is essentially giving a tax break to some of the larger producers — like Molson, for example, or Coors — who don’t have a stake in the brewing industry in Saskatchewan,” said Nicole Sarauer, who is also the MLA for Regina Douglas Park.

Sarauer’s concern stems from the government’s announcement last Thursday that it will implement broad changes to the markup SLGA charges breweries whose products are distributed through its retail stores.

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Under the old system, brewers making between 500,000 and 20 million litres per year were charged a markup of between $1.403 and $1.936 per litre, while larger national and international breweries paid between $1.553 and $2.086 per litre.

The new system does not distinguish between local, regional, national and international companies. Instead, it introduces a graduated system for all breweries, with most of the increments aimed at those making less than 20 million litres per year.

Markup rates for small brewers now range from $0.40 per litre to $0.70 per litre, while those making between two million and 20 million litres annually are charged $0.75 per litre. Larger breweries now pay $1.565 per litre.

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The changes stem from the Alberta NDP’s decision to jettison its own graduated markup system for a flat $1.25 per litre markup on all beer sold in the province, effective Aug. 5. The new rates will be offset by grants for Alberta-based producers.

On Thursday, Minister Responsible for SLGA Jeremy Harrison accused Notley’s government of “predatory” trade practices, and said the new markup amounted to a “declaration of war” on Saskatchewan breweries.

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“It’s potentially going to have a revenue impact — we don’t know that yet,” Harrison said. “(But) in the long term, we fully expect that this is going to end up creating benefits for the province in an aggregate sense, fiscally.”

Sarauer applauded changes that will benefit the province’s craft brewers, but said it’s the government’s responsibility to figure out the potential economic impact of any changes before making them. The new rules came into effect Tuesday.

“That’s a bit concerning in terms of making sure that our political decisions are done with the right amount of consultation, and on behalf of the best public policy for the province,” she said.

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In the 2014-15 fiscal year, SLGA sold $275 million worth of beer, up slightly from the $274 million recorded the year before. That accounts for 44 per cent of the $622 million in total liquor sales SLGA reported in 2014-15.

Sarauer said the government should also add more beer markup increments to allow mid-size breweries, like Great Western Brewing Co., to expand production beyond 20 million litres per year without suffering additional penalties.

Great Western, which makes between 17.5 and 20 million litres of beer each year, sells about half in Alberta. Its president, Michael Micovcin, said the new markup system will take “a lot of risk off the table” for the company.

Other Saskatchewan-based breweries also think the government ought to go further. Rebellion Brewing Co. brewmaster Mark Heise said the changes take Saskatchewan “from last place to last place,” and that more are necessary.

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